Viewpoint | Can a husband-and-wife company be recognized as a one-person company?
Published:
2022-12-26
Relevant cases of the Supreme Court in recent years: 1. Supreme People's Court heard the "Xiong Mou, Shen Mou application executor execution objection lawsuit retrial case" Highlights of the referee: The core issue is whether Qingmanrui is a one-person limited liability company. All the equity of Qingmanrui Company is essentially derived from the same property right, and is jointly enjoyed and controlled by one ownership. The equity subject has the consistency of interests and the unity of substance; at the same time, according to the provisions of Article 63 of the Company Law, it is considered that the assets of the company are Xiong and Shen, and the two parties are husband and wife, and the interests are highly consistent, and it is difficult to form effective internal supervision, the burden of proof that the company's property is independent of the shareholders themselves is allocated to the two shareholders, Xiong and Shen. The Supreme Court considers that there is a high degree of similarity between Qingmanrui and one-person limited liability companies in terms of subject composition and normative application. The Supreme People's Court upheld the second-instance judgment, that is, "Xiong and Shen are jointly and severally liable for the debts of Qingmanrui Company" 2. Supreme People's Court heard the "Taian Daiyue District Xindilong Drilling Service Center, Jia Juan Execution Objection Case Retrial Review and Trial Supervision" Highlights of the referee: As a limited liability company, Hongnuo Air Conditioning Company still lacks legal basis for defining it as a "one-person limited liability company", even if it is established by shareholders Jia Juan and Liang Ruolin with the joint property of husband and wife as described by the New Earth Dragon Well Center. In this regard, the original trial found that the claim of the Xindilong Drilling Center did not conform to Article 20 of the "Provisions on Changes and Additional Parties" and was not improper. It ruled that the retrial application of Xindilong Drilling Service Center in Daiyue District of Tai'an City was rejected. 3. case of dispute over construction contract between Xi'an Tianhong Electric Co., Ltd. and Qinghai Liteng New Energy Investment Co., Ltd. tried by the Supreme People's Court of China" Highlights of the referee: Regarding the issue of whether Li Ping should bear joint and several liability for repayment, the court believes that, in combination with the facts found out in the original trial, Li Ping and his wife often contributed capital to Qing. The shareholders of the company are not one and all have fully fulfilled their capital contribution obligations. Tianhong Company also has no evidence to prove that Li Ping's property is mixed with that of Li Ping. Tianhong Company claims to investigate Li Ping's joint and several liability according to the relevant legal provisions of one company, the legal basis is insufficient; the first-instance judgment found that Li Ping was not liable for joint and several settlement, and there was no improper, and the Court upheld it. Lawyer's view: According to Article 57, paragraph 2, of the Company Law, "A one-person limited liability company referred to in this Law refers to a limited liability company with only one natural person shareholder or one legal person shareholder." According to the literal interpretation of this provision, the basis for determining a one-person limited liability company is the number of shareholders, not the source of the shareholders' capital contribution, and not the independent judgment of whether the company is essentially a one-person limited liability company based on whether the property of the shareholders is independent. In the absence of clear provisions in the law and judicial interpretation, the practice of easily identifying husband and wife companies as one-person companies in judicial practice lacks legal basis. At the same time, China's law does not prohibit husband and wife or other people who have a joint property relationship to contribute to the same limited company, the husband and wife company as a substantial one-person company may exist excessive interpretation. As for whether the husband-and-wife company should bear joint and several liability for the company's debts with the personal property of the shareholders, whether the husband-and-wife company is a substantial one-person company should not be examined. According to the provisions of Article 20 of the Company Law, it should be examined whether the shareholders of the husband-and-wife company and the company's property are mixed, and whether it is in line with the elements of denial of legal personality, so as to judge the shareholders to bear joint and several liability for the company debts.
Relevant cases of the Supreme Court in recent years:
1. Supreme People's Court heard the "Xiong Mou, Shen Mou application executor execution objection lawsuit retrial case"
Highlights of the referee:
The core issue is whether Qingmanrui is a one-person limited liability company. All the equity of Qingmanrui Company is essentially derived from the same property right, and is jointly enjoyed and controlled by one ownership. The equity subject has the consistency of interests and the unity of substance; at the same time, according to the provisions of Article 63 of the Company Law, it is considered that the assets of the company are Xiong and Shen, and the two parties are husband and wife, and the interests are highly consistent, and it is difficult to form effective internal supervision, the burden of proof that the company's property is independent of the shareholders themselves is allocated to the two shareholders, Xiong and Shen. The Supreme Court considers that there is a high degree of similarity between Qingmanrui and one-person limited liability companies in terms of subject composition and normative application. The Supreme People's Court upheld the second-instance judgment, that is, "Xiong and Shen are jointly and severally liable for the debts of Qingmanrui Company"
2. Supreme People's Court heard the "Taian Daiyue District Xindilong Drilling Service Center, Jia Juan Execution Objection Case Retrial Review and Trial Supervision"
Highlights of the referee:
As a limited liability company, Hongnuo Air Conditioning Company still lacks legal basis for defining it as a "one-person limited liability company", even if it is established by shareholders Jia Juan and Liang Ruolin with the joint property of husband and wife as described by the New Earth Dragon Well Center. In this regard, the original trial found that the claim of the Xindilong Drilling Center did not conform to Article 20 of the "Provisions on Changes and Additional Parties" and was not improper. It ruled that the retrial application of Xindilong Drilling Service Center in Daiyue District of Tai'an City was rejected.
3. case of dispute over construction contract between Xi'an Tianhong Electric Co., Ltd. and Qinghai Liteng New Energy Investment Co., Ltd. tried by the Supreme People's Court of China"
Highlights of the referee:
Regarding the issue of whether Li Ping should bear joint and several liability for repayment, the court believes that, in combination with the facts found out in the original trial, Li Ping and his wife often contributed capital to Qing. The shareholders of the company are not one and all have fully fulfilled their capital contribution obligations. Tianhong Company also has no evidence to prove that Li Ping's property is mixed with that of Li Ping. Tianhong Company claims to investigate Li Ping's joint and several liability according to the relevant legal provisions of one company, the legal basis is insufficient; the first-instance judgment found that Li Ping was not liable for joint and several settlement, and there was no improper, and the Court upheld it.
Lawyer's view:
According to Article 57, paragraph 2, of the Company Law, "A one-person limited liability company referred to in this Law refers to a limited liability company with only one natural person shareholder or one legal person shareholder." According to the literal interpretation of this provision, the basis for determining a one-person limited liability company is the number of shareholders, not the source of the shareholders' capital contribution, and not the independent judgment of whether the company is essentially a one-person limited liability company based on whether the property of the shareholders is independent. In the absence of clear provisions in the law and judicial interpretation, the practice of easily identifying husband and wife companies as one-person companies in judicial practice lacks legal basis. At the same time, China's law does not prohibit husband and wife or other people who have a joint property relationship to contribute to the same limited company, the husband and wife company as a substantial one-person company may exist excessive interpretation.
As for whether the husband-and-wife company should bear joint and several liability for the company's debts with the personal property of the shareholders, whether the husband-and-wife company is a substantial one-person company should not be examined. According to the provisions of Article 20 of the Company Law, it should be examined whether the shareholders of the husband-and-wife company and the company's property are mixed, and whether it is in line with the elements of denial of legal personality, so as to judge the shareholders to bear joint and several liability for the company debts.
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